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Appraisal Alliance Group, LLC has answers to "Frequently Asked Questions"

Appraisal Alliance Group, LLC is ready to talk to you about any questions you might have about appraisals in Melbourne and Brevard County. Contact Appraisal Alliance Group, LLC today to talk about how we can help solve your specific valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons a person would require your services?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
After completing the appraisal, how can I have confidence that the final number is veritable?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Brevard County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



Describe an appraisal   (List of questions)

The appraisal process is an estimation that generates an opinion of value. The real estate appraiser will typically use a several "approaches," typically three, to conclude the estimation of market value. One of the methods is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. Another of the methods is the Sales Comparison Approach - which concerns finding a comparable analysis to other similar properties within a close proximity which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a home. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to find the market value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do?   (List of questions)

An appraiser forumlates a professional, unbiased determination of market value, in the support of real property exchanges. Appraisers illustate their findings in appraisal reports.


What are the reasons a person would require your services?   (List of questions)

There are many reasons to obtain an appraisal from Appraisal Alliance Group, LLC with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an report include:
  • If you are applying for a loan.
  • To reduce your tax burden.
  • To show a homeowner has 30% equity and remove insurance.
  • To contest high property taxes.
  • To deal with an estate.
  • To give you a negotiating tool when purchasing real estate.
  • To find an honest sales price when listing your home.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because a government agency such as the IRS requires it.
  • If you ever find yourself in a lawsuit.
Click here for a more extensive explanation of the process dealing with getting an appraisal.


Is an appraisal the same as a home inspection?   (List of questions)

Appraisers do not do provide residential property inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the property from foundation to attic. Usually, a home inspection report will evaluate the amenities and the necessities of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (List of questions)

To be blunt, it's like comparing opera to country. What the CMA relies upon are superficial trends. The appraisal is reliant on specific verifiable comparable sales. Location and architectural prices are also precedent in an appraisal. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The person creating the report is hands down the biggest difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent party, with no conditional interest in the property's value, unlike the real estate agent, who gets a commission based upon the value of the home.

What's in an appraisal report?   (List of questions)

The main point of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
  • Who engaged the appraiser and other intended users.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraiser's opinions and conclusions.
  • Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic factors, the property rights in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
  • Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • The scope of work considered while working up the job.
For a more in depth view of the work that goes into an appraisal report click here: Sample Appraisal Report


After completing the appraisal, how can I have confidence that the final number is veritable?   (List of questions)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • That the information analysis implemented in the appraisal was proper.

  • That substantial errors of omission or commission were not committed individually or collectively.

  • That appraisal services were not executed in a careless or negligent manner.

  • That a believable, substantiated appraisal report was conferred.
There are intense education and on the job experience requirements that must be satisfied in order to achieve the designation of "licensed appraiser" in Florida. Plus, appraisers must follow a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (List of questions) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is most often associated with many hours of coursework, tests and practical experience. Once an appraiser is licensed, he/she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers?   (List of questions)

Mortgage lenders are an appraiser's typical client, requiring their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Brevard County or other areas?   (List of questions)

Gathering data is one of the primary functions of an appraiser. Data can be classified as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is gathered from a variety of places. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. To double-check actual sales prices, we look at items in the assessor's office and other public documents. Appraisers often have to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other houses in the same market.


What can a full appraisal do for me?   (List of questions)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Appraisal Alliance Group, LLC is the best way to ensure assets are split up evenly. Simply put, a house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


What exactly is PMI and how can I get rid of it?   (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI takes care of the lender if a borrower defaults on the loan and the market price of the house is less than what is owed on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.

Does your monthly mortgage payment have a lineitem for PMI?Call Appraisal Alliance Group, LLC today at (321) 313-7100 or send us an e-mail. A current appraisal could save you thousands.

How do I get ready for the appraiser?   (List of questions)

We start with an inspection of the property. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general condition of its amenities. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and move any items that would make it difficult to measure the structure. On the inside, make sure we can easily access items like furnaces and water heaters.

You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
  • A survey or plot map of the property and building (if available).
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
  • Brag sheet that lists major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • Most recent real estate tax bill from Brevard and or legal description of the property.

What does "Market Value" mean?   (List of questions)

In real estate appraising, Market Value is commonly defined as:

"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."



Does the appraisal belong to the bank or the consumer?   (List of questions)

In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly entitled to a copy of the report - it's usually included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these situations, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.


How can I get the most ROI out of home improvements?   (List of questions)

This really depends on where the home is. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

As a rule, the best ROI from renovating a home comes in the kitchen. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms were second, yielding 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.